Scott Ford’s earlier post ,Musical Socialism: Everybody Wins (Sept. 2), suggesting a tax be imposed on devices that play, store, transfer, etc. digital media is an interesting idea, and many commentators agree. Exactly how to impose this sort of tax in a way that benefits the record industry and the creators of the music, while still making it affordable and reasonable for consumers, is something that has been written on extensively. Professor Terry Fisher, in Chapter 6 of Promises to Keep: Technology, Law and the Future of Entertainment, proposes a solution that would permit anyone to reproduce or distribute audio or video recordings over the internet. This is accomplished by encouraging film or music copyright owners to register their works with the Copyright Office, which then assigns them a unique registration number. The Copyright Office would then be responsible for administering a tax on digital recording devices, storage media and internet access providers and would divide the proceeds of the tax among owners of the copyright in registered works by tracking downloads of files by registration number.
Professor Raymond Ku, in his forthcoming article entitled The Creative Destruction of Copyright: Napster and the New Economics of Digital Technology, proposes retaining the current Copyright law for analog distribution, but would replace copyright in the internet context with a privilege allowing consumers to engage in noncommercial online distribution. If the revenue from analog sources proved insufficient to support the creation and distribution of music, Ku recommends the enactment of a statute imposing levies on sales of internet service and on computer, audio, and video equipment.
With an idea that uses parts of both Fisher and Ku's suggestions, Professor Jessica Litman, in a forthcoming comment Sharing and Stealing, has proposed a system which is probably more along the lines of what Scott Ford had in mind: a system where the proceeds from the tax go directly to the artists, rather than to the record label. Litman suggests assigning the right to collect the proceeds of the license directly to the individual creators of music rather than their intermediaries, but without relieving them of any contractual obligations they may have assumed to pass some portion of their receipts to others.
In the comment, Litman stresses the goal of “encouraging music file sharing, as distinguished from merely tolerating it.” She proposes a blanket license that would encourage works to be shared, but not require it. To accomplish this, a tax would be levied on the goods and services most directly involved in P2P file sharing. The proceeds collected from this tax would then be redistributed directly to the creators of the music, preferably by a non-governmental agency. The levy or tax approach, Litman claims, offers the “dual advantages of fairness and relative ease of administration – it can be imposed on commercial activities that earn money from P2P file sharing without inflicting significant burdens on consumers.” As far as encouraging but not requiring artists to share their music (and instead “horde,” as she puts it), Litman writes:
[my] proposal is motivated in part by my conviction that composers and musicians have been ill-served by the current system. If they nonetheless prefer the dysfunction they know to a new and unproved system, and we can make the system work without including them, I see no important policies that will be served by forcing them to participate. At the same time, it makes little sense to allow copyright owners to opt out too easily. A key element of my proposal relies on consumer willingness to pay a blanket license fee to share some but not all music. I believe that consumers will be willing to pay a blanket license fee if it seems clear that it is buying something of appropriate value. The value of the system would diminish significantly if the list of unshareable music were so long it became burdensome to check it.
Whether a system as the one Litman proposes could work is obviously yet to be determined, but it is an interesting idea nonetheless for a couple of reasons. First of all, music consumers will essentially have free access to most music through P2P type networks and only have to pay a blanket tax on goods and services. Second, the policy behind it will encourage artists to share, rather than horde (an option still retained), their music and directly profit from it.